Radio-frequency identification (RFID) technology makes use of communication through electromagnetic waves to exchange data between a terminal and an electronic tag committed to an object in order to improve identification and tracking (Bhuptani, 2005). RFID is used in expanding business applications for tracking and managing supply chains. This occurs especially in the manufacturing and retail businesses. This technology has gained significant popularity in supply and chain management because of the improvement in efficiency of inventory tracking and management. It has taken inventory concept to a higher level by reducing theft and fraud; it has also enhanced the process of product recall.
The main areas of the RFID technology application are the transport and logistics departments, especially when dealing with shipping, freight and management of yards. Mohsen (2009) notes that many organizations appreciate this technology as it has a positive impact on their businesses. To meet mandates, many companies are conducting pilot studies to gain experience and master the technology. The United States Section of Defense and Wal-Mart are some of the institutions that have realized the importance of RFID technology in improving their businesses’ effectiveness. Both groups require their vendors to adopt this technology and ensure that tags are placed on their shipments (Byrne & Patrick, 2004).
The spread and adoption of RFID is in its early stages in supply and chain management, although it is a time consuming process. Companies that embrace this technology should do it smoothly and slowly (Bhuptani, 2005). Learning about this technology and adopting it takes time. Before implementing it in practice, companies should first know whether they have sufficient resources to accommodate the technology and be in a position to tell if they are going to benefit. In most cases, organizations wait to see the impact of adopting this technology. This approach is risky since RFID implementation takes time with a myriad of lessons to learn (Rock-Tenn, 2004).
Complete Implementation of RFID is a tiring process, which should be approached with clear planning as it has special advantages to a business. According to Hoffman (2008), each section of an organization should be evaluated to determine the areas where this technology can offer benefits. However, the requirements of proper implementation include installation of software readers and tags in addition to labor training and setting up middleware. Deploying RFID requires economic and business analysis, which is a time consuming process. The outcome is projected to solve many of the problems this technology faces. The associated cost is expected to reduce which will make the adoption a viable investment.